Correlation Between Ivy Advantus and Realty Income

Can any of the company-specific risk be diversified away by investing in both Ivy Advantus and Realty Income at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ivy Advantus and Realty Income into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ivy Advantus Real and Realty Income, you can compare the effects of market volatilities on Ivy Advantus and Realty Income and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Ivy Advantus with a short position of Realty Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivy Advantus and Realty Income.

Diversification Opportunities for Ivy Advantus and Realty Income

0.51

Correlation Coefficient

Ivy Advantus  Realty Income

Very weak diversification

The 3 months correlation between Ivy and Realty is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Ivy Advantus Real and Realty Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Realty Income and Ivy Advantus is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Ivy Advantus Real are associated (or correlated) with Realty Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Realty Income has no effect on the direction of Ivy Advantus i.e., Ivy Advantus and Realty Income go up and down completely randomly.

Pair Corralation between Ivy Advantus and Realty Income

Assuming the 90 days horizon Ivy Advantus Real is expected to under-perform the Realty Income. In addition to that, Ivy Advantus is 1.59 times more volatile than Realty Income. It trades about -0.16 of its total potential returns per unit of risk. Realty Income is currently generating about -0.21 per unit of volatility. If you would invest  6,150  in Realty Income on September 23, 2024 and sell it today you would lose (871.00) from holding Realty Income or give up 14.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Ivy Advantus Real  vs.  Realty Income

Ivy Advantus Real

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ivy Advantus Real has generated negative risk-adjusted returns adding no value to fund investors. In spite of unfluctuating performance in the last few months, the Fund's fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Realty Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Realty Income has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Ivy Advantus and Realty Income

The main advantage of trading using opposite Ivy Advantus and Realty Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivy Advantus position performs unexpectedly, Realty Income can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Realty Income will offset losses from the drop in Realty Income's long position.

The idea behind Ivy Advantus Real and Realty Income pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.